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Eight donkeys crested the ridge and looked down into the valley. The had returned from countless adventures. They walked down from the pass – and brought hell beer, cigars, and ridiculous stories with them. The return would be glorious. Or at least there would be good scotch.

Now this is a rather long article detailing the wave of lawsuits against various mortgage companies and banks. Now unless you are Lazlo Hollyfeld and lived in a secret room accessbile only via the closet, you understand that we are in the midst of some pretty tough times right now. Depending on who you read, watch, or listen to the problems are the result of the bottom falling out of the housing market. No real need to further beat that dead horse, everybody knows or has some general understanding what happened there.

Now, where I do want to go is the ridiculous notion of people suing their mortgage lenders for their own failure in making good sound judgements. I will start by talking about a couple profiled in the article presented at the begining of this post. A couple from Boston ran into some tough times, the wife lost her job in early 2007. The article is a little vague on details but they at some point realized they needed to get their loan reworked from a refinance done in 2004 (according to the article that loan was a fixed rate loan).

I am going on a limb here, but I am going to make a few assumptions here:

Why if you refinanced in 2004 to a fixed rate loan, do you need to modify the terms of your mortgage now? This means that you weren’t misled into signing some exotic mortgage and are suddenly under the gun looking at a huge jump in your mortgage. The fact you lost your job, doesn’t mean the terms of your loan should be modified.

I am assumming that despite a job loss by one member of the household the mortgage was still being paid. It’s only after determining that in order to qualify for “assistance” the payments stopped. People lose their jobs all the time, other than medical or divorce it’s a big reason financial problems emerge.

This is just a stupid and a ridiculous lawsuit. Sure the lawyer in the article can state they are suing because WAMU didn’t keep their end of the bargain to help struggling homeowners. Sure the couple recognized they were going to be in trouble, but you don’t stop paying your mortgage because you want to make yourself better suited to receive help. In addition you do not request monetary damages because of the damage to your credit rating, claiming it was the fault of the mortgage company not responding to your requests. YOU STOPPED PAYING YOUR MORTGAGE ON PURPOSE…PERIOD! The damage to your credit was done the moment you decided you would show the bank who’s boss and stop making payments in order to get their attention. That would be like taking a laxative because you are constipated, going down to the basement with no bathroom to watch TV. Then in your rush upstairs to the toilet the basement door gets stuck, you crap your pants and sue the maker of the door or even the laxative maker for not detailing all the possible scenarios that could cause an “accident” .

Mr. and Mrs. Boston resident, I feel sorry for you. You lost your job that is tragic, but that still does not absolve you from paying your mortgage regardless of what you are trying to work out with the bank. In case you have been living under a rock, the mortgage assistance has been targeted at those who were “taken advantage” of anyway, not those who ran into trouble due to normal life things like: losing a job.

Which leads me to the next “victim” outlined in this article. The gentleman from Las Vegas who feels duped because he DIDN’T read the loan docs before sigining them. This is another great example of personal responsibility. If you read the article from above, you will know then that this man has had a tough life regarding his health and lives on Social Security. The man ran into money troubles in 2005 and refinanced his loan to get a little money. A lender he supposedly worked with for years worked to get his refinance complete and encouraged him to not worry and just sign the 200 page loan document….trusting this person, he did just that.

Low and behold, he signed docs committing him to am adjustable ARM loan, with a ballooning payment. He claims this “subprime loan” should not have been given to him, he was better than that (according to him he had a 740 credit score and shouldn’t have been in that type of loan period). My first question: how did you know you were better than that loan? Secondly, I would argue that if you are refinancing due to debt problems and needed money, you might have been a better candidate for a sub-prime loan. Finally, if you were in trouble with debt and needed money, did you really have a 740 credit score?

I am sorry Mr. Vegas resident that your health over the years has led you to monetary problems. It still does not remove the fact you signed something that you shouldn’t have. This leads me to my final part of this article, personal responsibility points.

A home is the single largest financial investment most people will make in their entire lives. You look through all the information in the documentation provided from your mortgage company before signing. No matter how much you want the house, if the terms are not right….DON’T SIGN IT. In the end regardless of what somebody tells you, you have to pay the bills.

Home Ownership is not for everybody. If you don’t have the personal responsibility to be diligent in saving money, then maybe you shouldn’t own a home. The upkeep and other miscellaneous expenses cost money. Money that should not come from a credit card, money that should come from a rainy day fund.

A mortgage is a contract with a company that YOU WILL REPAY what the lender took a risk in giving you. Sure there may be lenders with fewer morals than others (see #1 above to weed those out). There is nothing in that contract however that states you will get your loan terms re-worked should you run into any sort of trouble.

If you run into troubles during your lifetime, you do what you can to make the payments. If you have to get a 2nd job to pay the bills, you do so. Sure it puts a slight burden on the family, but so does bankruptcy and foreclosure (which actually puts burdens on your neighbors and other homeowners). Aside from medical expenses that arise from an unexpected diagnosis with an illness that requires expensive treatments that insurance doesn’t cover, there are few reasons you can’t work hard to keep to your obligations.

If you are laid off from a job and burn through your emergency funds, you should not be turning down job offers because they may not be what you want. I have seen and heard stories where people lost their jobs and claimed they couldn’t find another one. Only to find out they were turning down job offers because it wasn’t paying enough or wasn’t their ideal job. Let’s see…you are not earning an income, likely living off government assistance and a job that pays less isn’t better. Well let me be the first to tell you: it is enough! Less money coming in is better than NO money coming in. See point #4 if necessary.

I will not deny that some mortgage lenders, real estate agents, appraisers and others in the home industry were less than honest during the housing boom. However, this is no different than in any other time or industry. It’s you the consummer who needs to take responsiblity to know where your money is going. I equate this responsibility to getting a 2nd or 3rd opinion from a doctor when diagnosed with an ailment. If you think possibly that the 1st doctor is wrong, visit a 2nd one. Take responsibility for your actions and if you screwed up, admit it, work to fix it and move on. However, putting the blame on those who you claimed took advantage of you is not taking personal responsibility.

As everybody is aware for some time now the US and the World economies are reeling. We are in the midst of the worst economic situation most people in the US have ever experienced (and for me hopefully the worst we will ever see). There are new companies laying off employees what seems like daily….500 here, 3000 there. Our Federal Government’s solution is to turn on the printing presses and churn out more and more money, then give it out in the form of various “stimulus” bills aka new age welfare.

We have already seen them bailout big banks and the auto industry, now the latest group to begin stepping forward are state and local governments. The states you see are also sufferring due to falling property values, a drop in consummer spending, etc.. all resulting in dwindling state revenues which are used to pay for all the great government services that are available to each of us.

Case in point I give you North Carolina. You see North Carolina is likely going to experience a $2 billion deficit. So what’s one to do: If you are Governor Bev Purdue, you take a trip to Washington DC to meet with the legislature and President-Elect Obama’s team. To do what – request North Carolina be earmarked for some of the next round of “stimulus” money. Now here’s the kicker, before leaving to visit Washington DC SHE APPARENTLY SPENT 2 HOURS POURING THROUGH THE BUDGET AND FOUND $1 BILLION IN SAVINGS IN SAID 2 HOURS, BUT APPRENTLY THAT’S ALL SHE CAN FIND.

Huh, what..2 hours? Two hours finds $1 billion, you mean to tell me that you couldn’t possibly spend say a week or maybe a month and find the other $1 billion needed to close the gap. Instead you are calling all bets off after 2 hours, that’s it the timer has gone off I can’t spend another minute on this because I just can’t….then you run with your hand out to Washington stating – I need another billion. I spent 2 hours looking and I can only find half of the $2 billion deficit.

***Quick sidebar – Obama if you happen upon this story, you may want to get Bev Purdue a role in your administration. Imagine what she could do for the Federal Budget in 2 hours. If Jimmy Hoffa’s case is still active Mr. Lawman you might want to consider sending the case files over, Gov. Purdue would solve it in 2 hours. Ok, moving on.

If you found $1 billion that quickly, then my thoughts are: what was so easily spotted that you could quickly determine in 2 hours it can be cut? Gov. Purdue I ask you – what is in that $1 billion and do we really need it back in the budget? What this proves to me is that government budgets whether state or federal, are full of big chunky pieces of pork fat. Don’t get me wrong Gov. Purdue I know you yourself didn’t spend 2 hours alone, I am not that naive. My point is this – if you spent 2 hours and found a billion, imagine what you could do if you got your staff working for days and weeks on this. I would bet you could not only find another billion, I bet you could exceed a billion.

For those who read this, you should pay careful attention to not just your representation in the federal government but those who are responsible for minding the books in your state and local government. Governors and State legislatures are combing through their budgets trying to close growing deficits. You will likely see this in the form of cuts in services (some good, some not so good) and in the form of raised taxes…or the case of Oregon and possibly North Carolina new ways to tax it’s citizens via a mileage tax that you pay based on the number of miles you drive in a year. Some may even approach the federal government for a handout.

Finally, keep this in mind: as the printing presses continue to print money, the value of the money in all our wallets, bank accounts, IRAs, 401Ks or whatever investment vehicle could be worth less (think supply and demand and what happens when a market gets flooded with too much of the same product). If we just give money to the states or even businesses, are we really making them more productive? Or are we really just delaying the inevitable? Should the citizens of Washington State be responsible for bailing out North Carolina? That’s exactly what will happen because the Federal government will need to recoup that money at some point….how…..taxes, at some point China and others will stop being our ATM!

So I am sitting down the other day watching a notoriously left wing TV show in the Bill Maher show on HBO, when he interviews David Walker. For those who don’t know who this particular gentleman is, he is the former Comptroller for the GAO (essentially the top accountant for the US Government). Now, for those who did know him you will also likely know he is no longer in that position since early 2008. Mr. Walker resigned his post, which you have to ask why is that important….well it’s because this particular position is one that is appointed for 15 year terms and he was still 5 years away from completing his term.

I will not sit here on this blog and profess to know everything about this man nor his past positions both inside and outside government. However, after listening to this man speak on Bill Maher’s show I realized one thing: this current financial crisis our great country is experiencing is nothing compared to the issue lingering in the shadows of the dark alley our nation is currently walking down. We can argue all we want that big banks are failing, housing was way overvalued, that we are losing our capitalist society..etc, but the truth is our nation as it stands right now is on the road essentially to bankruptcy. Medicare and Social Security alone will take us there. And I am not talking about the type of bankruptcy where your neighbor loses their job and didn’t have an emergency rainy day fund so they lose everything. We are talking about an entire nation where the government is broke! The kind of fiscal problems that would make California’s recent news headlines that they could be in need of a potential $8 Billion loan pale in comparison.

If you don’t believe me, a lowly average citizen who has no economic background at all, then maybe you should watch this Glenn Beck interview with David Walker:

Let’s take a single headline from that story: the average hit to the American household is $400K per household. How many of us have $400K lying around as Beck asks? Let me go ahead and start: not me, so everybody elses bill just went up. Now I am not naive to think our country had obligations that we could afford but David Walker and Glenn Beck did a great job of putting things into perspective.

The problem is that nobody wants to discuss this in detail. Why you may ask, I have an easy answer: it’s not sexy and doesn’t win votes. What wins votes is saying things like: cutting taxes, keeping government out of citizens lives or slamming your opponent in 30 second feel good TV ads. What is the problem with that approach, if you watched the above video you will see that none of that matters. Instead we have to hear how expensive the wars in Iraq or Afghanistan are, how we are giving tax breaks to the wrong people, how we need to rescue the mortgage industry….who the hell cares, we can’t afford all the policies and the direction we are currently going in. It’s like accusing McDonald’s of making you fat, as you stuff another Big Mac down your throat and saying they should do something to make the food healthier. If you don’t address the real issues, you just continue to repeat the same pattern – DON’T EAT MCDONALD’s all the time. Same for government, raising or lowering taxes does nothing when our revenues can’t even sustain our policies right now.

While I am not saying the world will end tomorrow, but unless we as a nation begin to think beyond just the next political term or the next budget year nothing will ever change and this current financial crisis will be a drop in the bucket compared to what bills are coming due. The next time you are in the voting booth, not just for President but all elected offices, ask yourself: is this person going to help this country be great for 10, 20, 30, 100+ years. Don’t vote based on the 30 infomerical ad run by the candidates (which are created by clever marketing folks to appeal to your easiliy manipulated senses). Don’t vote because you think the person would be great to hang out with. Vote because you truly understand the issues and that person you are voting for understands them too. In the end we are all swimming in the same pool. And right now, somebody is peeing in the pool and nobody is paying attention.

**This is not necessarily an endorsement of David Walker or the foundation he heads up. Rather this is just an attempt to make people see we have a much bigger elephant in the room. Good day to all.